Exam 30: Insurance

The existence of an insurable interest is a primary concern when determining liability under an insurance policy.

For property insurance, the insurable interest must exist when a policy is purchased.

Risk management is the transfer of certain risks from an individual to an insurance company.

A binder provides temporary insurance coverage.

Frank applies to GuardDog Insurance Company for homeowners' insurance. The company issues a policy, but later discovers that Frank's application includes several misstatements. Most likely, these misstatements can

A person can insure anything in which he or she has an insurable interest.

An absolute defense against payment exists if the insurer can show that the insured lacked an insurable interest.

Engineering Associates, P.A., obtains an insurance policy that protects its members against negligence claims by their clients. This is

Any loss sustained before the effective date of an insurance policy will not be covered.

Riverside Storage obtains a fire insurance policy from Security Insurance, Inc., on a $400,000 warehouse. The policy includes an 80-percent coinsurance clause. Riverside insures the property for $320,000. In a fire, the warehouse suffers $200,000 in damage. The insured can recover

Rob applies to Standard Insurance Company for a life insurance policy. On the application, Rob understates his age. Rob obtains the policy, but for a lower premium than he would have had to pay had he disclosed his actual age. The policy includes an incontestability clause. Five years later, Rob dies. Can Standard refuse payment on the policy?

Dan applies for a life insurance policy with Equity Insurance Company through Fletch, an agent who works for Equity. Dan pays the initial premium. Fletch writes a binder, which

Federal law determines the status of all parties writing insurance.

Roy, an accountant, injures Sally. She files a claim to recover for the injury under Roy's homeowners' insurance policy. Liability coverage under a homeowners' policy normally applies to liability that arises from

For an insurance contract to be binding, consideration in the form of a premium must be given.

Comprehensive general liability insurance can encompass as many risks as the insurer is willing to cover.

Ruth obtains a fire insurance policy on her house from Safety Insurance Company. Later, after she moves out and the house is empty, a fire destroys the structure. Most fire insurance policies require that at the time of a loss, the insured premises be

Mena applies for a homeowners' insurance policy on her house with Neighbors Insurance Company through Obie, an agent who works for Neighbors. In this transaction, Obie is

Lighting Concepts, Inc., a trade fixture vendor and installer, wants to insure itself against injuries to employees and others on the premises during and after work hours. This business should obtain

The person who receives the proceeds under an insurance policy is called a beneficiary.